UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 31, 1997
CD RADIO INC.
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(Exact name of registrant as specified in its charter)
State of Delaware 0-24710 52-1700207
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(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of Identification No.)
incorporation)
Sixth Floor, 1001 - 22nd St., N.W., Washington, D.C. 20037
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(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code (202) 296-6192
Not applicable
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(Former name or former address, if changed since last report)
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2
Item 5. Other Events.
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By a contract amendment dated July 31, 1997 ("Contract Amendment No.
15"), attached hereto as Exhibit 99.1 and incorporated herein by reference, the
Registrant and Space Systems/Loral, Inc. ("SS/L") amended Contract No. SS/L -
TP93002-01 dated March 2, 1993, as amended by the parties thereto, most recently
pursuant to contract amendment no. 14, dated as of June 30, 1997 (the
"Contract"). By a contract amendment dated August 4, 1997 ("Contract Amendment
No. 16")" attached hereto as Exhibit 99.2 and incorporated herein by reference,
the Registrant and SS/L further amended the Contract.
Item 7. Exhibits
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Exhibit Number
(Referenced to Item 601
of Regulation S-K) Description of Exhibit
----------------------- ----------------------
99.1 Contract Amendment No. 15 entered into as
of July 31, 1997 between the Registrant and
SS/L.
99.2 Contract Amendment No. 16 entered into as
of August 4, 1997, between the Registrant
and SS/L.
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3
Signatures
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Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: October 6, 1997
CD RADIO INC.
By: /s/ Lawrence F. Gilberti
---------------------------
Lawrence F. Gilberti
Chief Executive Officer
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4
EXHIBIT INDEX
Pursuant to Item 601 of Regulation S-K
Exhibit No. Description of Exhibit
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99.1 Contract Amendment No. 15 entered
into as of July 31, 1997 between the
Registrant and SS/L.
99.2 Contract Amendment No. 16 entered
into as of August 4, 1997, between the
Registrant and SS/L.
AMENDMENT NO. 15
TO
CONTRACT NO. SS/L-TP93002-01
AND
SPACE SYSTEMS/LORAL
FOR
DELIVERY OF CD RADIO DARS SYSTEM
THIS CONTRACT AMENDMENT NO. 15 (the "Amendment") is entered into effective as of
31 July 1997, between CD RADIO INC. (the "Purchaser") and SPACE SYSTEMS/LORAL,
INC. (the "Contractor").
WHEREAS, Contractor and Purchaser are parties to Contract No.
SS/L-TP93002-01 dated March 2, 1993, as amended by the parties thereto, most
recently pursuant to Contract Amendment No. 14 dated 30 June 1997 (as so
amended, the "Contract").
WHEREAS, Contractor and Purchaser desire to amend the Contract,
NOW, THEREFORE, in consideration of the mutual covenants and conditions in
this Amendment, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:
1. The page from the Contract, attached to this Amendment as Exhibit A and
incorporated herein by reference, are hereby substituted for existing pages in
the Contract, in their entirety, as follows:
Existing Page (Remove) Replacement Page (Attached)
71 71
2. All capitlaized terms in this Amendment, not otherwise defined herein,
shall have the meanings ascribed to them in the Contract.
3. The Contract, as modified by the express terms of this Amendment, is
hereby ratified and affirmed by Purchaser and Contractor, and shall remain in
full force and effect.
IN WITNESS WHEREOF, the Parties have executed this Amendment
effective as of the date first above written.
CONTRACTOR: PURCHASER:
SPACE SYSTEMS/LORAL, INC. CD RADIO INC.
By: /s/ R.A. Haley By: /s/ R.D. Briskman
--------------------------- -----------------------------
Name: R.A. Haley Name: R.D. Briskman
--------------------------- -----------------------------
Title:President & CFO Title:President of CD Radio Systems
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AMENDMENT NO. 16
TO
CONTRACT NO. SS/L-TP93002-01
AND
SPACE SYSTEMS/LORAL
FOR
DELIVERY OF CD RADIO DARS SYSTEM
THIS CONTRACT AMENDMENT NO. 16 (the "Amendment") is entered into as of 4 August
1997, between CD RADIO INC. (the "Purchaser") and SPACE SYSTEMS/LORAL, INC. (the
"Contractor").
WHEREAS, Contractor and Purchaser are parties to Contract No.
SS/L-TP93002-01 dated March 2, 1993, as amended by the parties thereto, most
recently pursuant to Contract Amendment No. 15 dated 31 July 1997 (as so
amended, the "Contract").
WHEREAS, Contractor and Purchaser desire to amend the Contract to add
delivery of a third satellite, to provide for the deferral of Purchaser
payments, and to effect other miscellaneous modifications to the Contract,
NOW, THEREFORE, in consideration of the mutual covenants and conditions
in this Amendment, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:
1. For the purposes identified herein, the replacement or new Contract
pages, attached to this Amendment as Exhibit A and incorporated herein by
reference, are hereby substituted for existing pages in the Contract, in their
entirety, as follows:
<TABLE>
<CAPTION>
Existing Page Replacement/
Page (Removed) New Pages Purpose
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<S> <C> <C>
i, ii i, ii Revised Table of Contents
iii iii Revised list of Appendices and Attachments
2 2 Addition of 3rd Satellite to Witnesseth
3, 5 3, 5 Revision to Definitions
6 6 Revise Exhibits A-D dates/Delete Exhibit E articles 2.2 and 2.3
7 none Delete Launch Vehicle Interface provision
8-9 8-9 Revise Deliverable items and schedule
9 9 Revise Late Delivery Penalties schedule
10-11 10-11 Revise Early Delivery Incentive schedule
13 13 Revise Contract Price to include 3rd satellite
14 14 Insert reference to revised Payment Plan
Change escalation date
15 15, 15.1 Deletion of Article 5.4, Letter of Credit
Add provision and terms for payment deferrals
16 16 Revise launch vehicles to be used
18-19 18-19 Delete requirement for Letter of Credit
20, 21 20, 21 Revision to Final Acceptance
22 22, 22.1 Revision to Title and Risk of Loss
26 26 Revision to Satisfactory Operation
27 27 Revise Additional Satellite Option
28 28 Delete Command Encryption - Additional Satellite
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Existing Page Replacement/
Page (Removed) New Pages Purpose
- -------------- ------------ ---------------------------------------------------------------
<S> <C> <C>
29 29 Revision to Successful Injection Definition
30 30 Addition of Insurance Option, Article 16
31-33 31-33 Revisions to Article 17
41 41 Add Property Insurance Certification
45 45 Deletion of reference to Letter of Credit
50 50 Changes in Uplink frequencies
52 52 Update Option Period in Article 29
57-58 57-58 Delete TT&C Ground Station Option
59 59, 59.1 Revision of Ground Storage Option
62 62 Changes in notification requirements
66 66 Deletion of Command Encryption Option
67 67 Revised ROM for Extended Mission
Operations Support Option
68 68 Revision to Support for Investigation of Satellite Anomalies
71 71 Delete Article 44, Agreement Expiration
A-1, A-1a A-1, A-2 Revised Payment Plan
B-1 to B-3 B-1 Delete Letter of Credit
D-1 none Delete Letter of Credit Amounts
</TABLE>
2. DEFINED TERMS. All capitalized terms in this Amendment, not otherwise
defined herein, shall have the meanings ascribed to them in the Contract.
3. RATIFICATION AND AFFIRMATION. The Contract, as modified by the
express terms of this Amendment, is hereby ratified and affirmed by Purchaser
and Contractor, and shall remain in full force and effect.
IN WITNESS WHEREOF, the Parties have executed this Amendment effective
as of the date first above written.
CONTRACTOR: PURCHASER:
SPACE SYSTEMS/LORAL, INC. CD RADIO INC.
By: /S/ R.A. HALEY By: /S/ DAVID MARGOLESE
------------------------- -------------------------
Name: R.A. HALEY Name: DAVID MARGOLESE
Title: VICE PRESIDENT & CFO Title: CHAIRMAN AND CHIEF EXECUTIVE
OFFICER
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SS/L-TP93002-01
Amendment 16
CONTENTS
ARTICLE PAGE
1 DEFINITIONS...........................................................3
2 SCOPE OF WORK.........................................................6
3 DELIVERABLE ITEMS AND DELIVERY SCHEDULE...............................8
4 PRICE................................................................13
5 PAYMENTS.............................................................14
6 PURCHASER FURNISHED ITEMS............................................16
7 RESERVED.............................................................18
8 INSPECTION, INTERIM AND FINAL ACCEPTANCE.............................20
9 F.O.B. POINT, TITLE, AND RISK OF LOSS................................22
10 ACCESS TO WORK IN PROGRESS...........................................23
11 TAXES AND DUTIES.....................................................24
12 IN-ORBIT CHECK-OUT...................................................25
13 SATISFACTORY OPERATION...............................................26
14 ADDITIONAL SATELLITE OPTION..........................................27
15 SUCCESSFUL INJECTION.................................................29
16 INSURANCE OPTION.....................................................30
17 OPTION FOR LAUNCH ON A FOREIGN LAUNCH VEHICLE .......................31
18 FORCE MAJEURE........................................................34
19 PURCHASER'S DELAY OF WORK............................................36
20 RIGHT IN DATA........................................................37
21 PATENT INDEMNITY.....................................................39
22 INDEMNITY - PERSONAL INJURY/PROPERTY DAMAGE..........................41
23 RESERVED.............................................................42
24 DEFAULT..............................................................43
25 WARRANTY.............................................................47
26 DISPUTES AND ARBITRATION.............................................49
27 CHANGES..............................................................50
28 MISCELLANEOUS PROVISIONS.............................................51
29 LAUNCH DATES.........................................................52
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30 INTER-PARTY WAIVER OF LIABILITY......................................53
31 AUTHORITY OF THE PURCHASER'S REPRESENTATIVE..........................54
32 PUBLIC RELEASE OF INFORMATION........................................55
33 FUNCTIONS NOT THE RESPONSIBILITY OF THE CONTRACTOR ..................56
34 RESERVED.............................................................57
35 SATELLITE GROUND STORAGE OPTION......................................59
36 NOTICES..............................................................62
37 ASSIGNMENT...........................................................63
38 DELAYED LAUNCH OF A SATELLITE........................................64
39 RESERVED.............................................................66
40 EXTENDED MISSION OPERATIONS SUPPORT OPTION...........................67
41 SUPPORT FOR INVESTIGATION OF SATELLITE ANOMALIES.....................68
42 INSURANCE............................................................69
43 MISSION OPERATIONS SUPPORT...........................................70
44 DARS LICENSE.........................................................71
45 STANDARD OF CONDUCT..................................................72
46 ORDER OF PRECEDENCE..................................................73
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SS/L-TP93002-01
Amendment 16
APPENDICES AND ATTACHMENTS
Attachment A Payment Plan
B Reserved
C Non-Disclosure Agreement
iii
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SS/L-TP93002-01
Amendment 16
WITNESSETH
WHEREAS, the Purchaser desires to procure three Satellites for the CD Radio DARS
System and retain the option to purchase one more Satellite of the identical
design and certain services from the Contractor for use on the CD Radio DARS
System;
WHEREAS the Contractor is willing to furnish such Satellites and certain
services as stated herein, in consideration of the Price and other terms and
conditions of this Contract;
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained, and other good and valuable consideration, the receipt of which is
hereby acknowledged, the Parties hereby agree as follows:
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SS/L-TP93002-01
Amendment 16
ARTICLE 1. DEFINITIONS.
The following terms shall have the meanings assigned to them, (unless the
context requires otherwise,) in this Contract:
1.1 The "Purchaser" means CD Radio Inc.
1.2 The "Contractor" means Space Systems/Loral.
1.3 The "Parties" means the Purchaser and the Contractor who are the
principals of this Contract.
1.4 "Contract" means this executed procurement Contract and its
Exhibits, plus any amendments thereto, to which the Parties agree
in writing.
1.5 "Satellite" or "Spacecraft" shall mean the CD Radio DARS System
Satellites (DARS) contemplated by and to be supplied to the
Purchaser under this Contract, and which are capable of being
placed in a geostationary orbit.
1.6 "Mission Operations Support Services" shall mean the services
performed by the Contractor including orbit raising of the
Satellite and in-orbit testing of the Satellite.
1.7 "Terminated Ignition" for Ariane 5 shall mean, for each Satellite
separately, that Intentional Ignition has occurred and is not
followed by the ignition of at least one of the solid propellant
booster(s). "Terminated Ignition" for Ariane 4 shall mean, for
each Satellite separately, that Intentional Ignition has occurred
and is not followed by the ignition of the first stage engines of
the Launch Vehicle and opening of the table clamps. "Terminated
Ignition" for Atlas shall mean, for each Satellite separately,
that Intentional Ignition has occurred and is not followed by the
release of the Launch Vehicle from the launcher holddown
restraints.
1.8 "Launch Vehicle" means the expendable Launch Vehicle used for the
Launch of the CD Radio DARS Satellites, as shall be designated by
the Purchaser in writing.
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SS/L-TP93002-01
Amendment 16
1.17 "Intentional Ignition" means the start of the ignition process
for the purpose of Launch, which is the time at which the command
signal is sent to the Launch Vehicle.
1.18 "Launch Pad" shall mean the designated area at the Launch Site
from which the Satellite will be launched.
5
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SS/L-TP93002-01
Amendment 16
ARTICLE 2. SCOPE OF WORK
2.1 WORK EFFORT
The Contractor shall provide the necessary personnel, material,
services, and facilities, to manufacture, test and deliver to the Launch
Site, or storage as specified in Sub-Article 3.3, three complete
communications Spacecraft in accordance with the Satellite Performance
Specification, Exhibit B to this Contract, and perform the services
described in Exhibit A, Statement of Work, (except those items of
hardware and services listed as "optional", unless such options are
exercised by the Purchaser in accordance with the terms of this
Contract), to the extent specified in this Contract, and to perform the
work required hereunder in accordance with the Exhibits and Annexes
listed below, which are attached hereto and made a part hereof by
reference: 2.1.1 Exhibit A, Statement of Work (SOW)
Revision 1, dated 16 July 1997
2.1.2 Exhibit B, Satellite Performance
Specification, Revision 4, dated 15 July 1997
2.1.3 Exhibit C - Product Assurance Program Plan,
Revision 2, dated 15 January 1997
2.1.4 Exhibit D - Test Plan,
Revision 2, dated 15 January 1997
6
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SS/L-TP93002-01
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Intentional Left Blank
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SS/L-TP93002-01
Amendment 16
ARTICLE 3. DELIVERABLE ITEMS AND DELIVERY SCHEDULE
3.1 SATELLITE DELIVERY
Each of the Satellites shall be delivered for Launch in accordance with
the provisions of Exhibit A, with such delivery being deemed to have
occurred at the time of arrival at the launch base. Written
authorization to ship a Satellite will be provided by the Purchaser at
the conclusion of Interim Acceptance for that satellite. For a Satellite
delivered into storage pursuant to Article 35, delivery shall be deemed
to have occurred when the Satellite arrives at the designated storage
site.
3.2 DELIVERY OF SERVICES
Delivery of services shall be deemed to have occurred when the said
services have been completed in accordance with the requirements of
Exhibit A.
3.3 DELIVERABLE ITEMS
The goods and services to be delivered and the corresponding delivery
schedule under this Contract are as follows:
ITEM DESCRIPTION DELIVERY SCHEDULE PLACE OF DELIVERY
1 First Satellite 11 August 1999 Launch Site
(FM 1)
Second 5 months following Launch Site
Satellite (FM 2) delivery of first
satellite
Third Satellite (FM 3) 11 months after Purchaser
delivery of second designated CONUS
satellite storage site
2 Optional Satellite Per Sub-Article Purchaser
14.2 designated CONUS
storage site
3 Launch Support (Atlas Commencing 6 weeks Launch Site
Launch) for FM I and prior to Launch per
FM 2 Exhibit A
4 Mission Operations Per Exhibit A Per Exhibit A
Support Services
FM 1 and FM 2
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SS/L-TP93002-01
Amendment 16
ITEM DESCRIPTION DELIVERY SCHEDULE PLACE OF DELIVERY
5 Launch/Insurance As Required N/A
Management Support
Services for FM 1 &
FM 2
6 Data and Per Exhibit A Per Exhibit A
Documentation
7 Training Per Exhibit A Palo Alto, CA
New York, NY
8 Option for Launch on a Per Article 17 Launch Site
Foreign Launch Vehicle
9 Insurance Option Per Article 16 N/A
Note: Contractor acknowledges Purchaser's desire for an accelerated delivery
schedule for the second Satellite. Contractor will as a goal endeavor to meet
Purchaser's desired delivery date of October 1999 for this Satellite.
3.4 LATE DELIVERY PENALTIES
In the event that a flight Spacecraft is not delivered by the stipulated
date plus thirty (30) days (grace period) in accordance with the
provisions of this Contract, the Price specified in Article 4 - PRICE
shall, unless such delays are excusable within the meaning of Article 18
- FORCE MAJEURE, be reduced as follows:
Each Spacecraft
CALENDAR DAYS DELIVERY IS LATE PRICE REDUCTION
32st through 120th $15,000 per day
Maximum Price Reduction $1,350,000.00
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SS/L-TP93002-01
Amendment 16
After 120 days delivery delay, the Purchaser may invoke Article 24 -
DEFAULT.
3.5 DELAY OF LAUNCH WHICH IS NOT DUE TO LATE DELIVERY BY THE
CONTRACTOR
Notwithstanding the provision of Sub-Article 3.4 above, if the
Contractor is able to meet the scheduled Launch date of a particular
Spacecraft, or a Launch date that is rescheduled due to no fault of the
Contractor, and the Contractor is able to deliver the Satellite in order
to meet the rescheduled Launch date, then no reduction in the Price
specified in Article 4 - PRICE, shall be made.
3.6 PAYMENT OF LATE DELIVERY PENALTIES
Any late delivery penalties incurred by the Contractor for a
particular Satellite shall be paid by the Contractor at the time of
Launch of that particular Satellite. The Contractor shall wire transfer
the amount of the late delivery penalties to the bank specified by the
Purchaser.
3.7 LIMIT OF LIABILITY
EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED HEREIN, THE CONTRACTOR SHALL
NOT BE LIABLE FOR ANY SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL
DAMAGES OR FOR LOST REVENUES OR PROFITS DUE TO LATE DELIVERY OF ANY
ITEMS, INCLUDING BUT NOT LIMITED TO THE SATELLITES REQUIRED TO BE
DELIVERED UNDER THIS CONTRACT.
3.8 EARLY DELIVERY INCENTIVES
In the event that a flight Spacecraft is delivered any time prior
to one month after the stipulated date in accordance with the provisions
of this Contract, and the Purchaser is able to take advantage of the
early delivery by scheduling an earlier Launch date, then the Contractor
shall be entitled to earn an Early Delivery Incentive payment for each
day the Spacecraft is delivered prior
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SS/L-TP93002-01
Amendment 16
to one month after the scheduled delivery date up to the amount of days
that the Purchaser is able to advance the Launch date from the original
scheduled Launch , as follows:
EACH SPACECRAFT
CALENDAR DAYS DELIVERY IS EARLY INCENTIVE RATE
1st through 90th $15,000 per day
Maximum Price Increase $1,350,000.00.
In the event that the Contractor is able to deliver any of the
Spacecraft earlier than one month after the scheduled delivery date but
the Purchaser is not able to arrange an earlier Launch Date, then the
Contractor shall be entitled to earn the following early delivery
incentive:
EACH SPACECRAFT
1st through 30th day $1,350 per day
3.9 PAYMENT OF EARLY DELIVERY INCENTIVES
Any Early Delivery Incentives earned by the Contractor for a
particular Satellite shall be paid by the Purchaser at the time of
delivery of that particular Satellite.
3.10 EARNED DELIVERY INCENTIVES FOR A STORED SATELLITE
In the event any Satellite is delivered early and is subsequently
stored pursuant to Article 35 - SATELLITE GROUND
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Amendment 16
4. PRICE
The price to be paid by the Purchaser to the Contractor for
performance of the Scope of Work set forth under items 1,3, 4, 5, 6 and
7 of Article 3, DELIVERABLE ITEMS AND DELIVERY SCHEDULE, is Two Hundred
Seventy-One Million Seven Hundred Fifty Thousand Dollars ($271,750,000).
This price includes the first payment to be made in accordance with the
Payment Plan, Attachment A hereto, and said first payment is
non-refundable in the event of cancellation. In the event that the above
price is escalated through operation of terms of this Contract, then the
price escalation shall not be applied to the amounts of the first and
second payments as identified in the Payment Plan, Attachment A.
This price does not include any of the options available to the
Purchaser under the terms of this Contract. In the event that the
Contractor receives a contract from one or more customers, other than CD
Radio Inc., for a Satellite procurement intended to provide direct audio
radio service in the United States of America, then the Purchaser shall
receive a refund on the above Price for a percentage of the
non-recurring effort charged to CD Radio Inc. in the above Price. The
calculation of the refund shall be based on the amount of non-recurring
effort that is common to the Programs. This non-recurring Price shall be
divided between the Programs. Any portion of the non-recurring Price
that is unique to the CD Radio DARS System Satellites shall not be
included in the calculation of the refund.
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ARTICLE 5. PAYMENTS
5.1 MILESTONES
Payments by the Purchaser to the Contractor of the Price set forth in
Article 4, shall be in accordance with the Payment Plan, Attachment A,
Revision 1 which is attached and incorporated into this Amendment 15.
5.2 ESCALATION
The prices, for options in this Contract, and provided for under Article
4, shall be escalated in accordance with the formula provided below from
November 1996 to the date an option is exercised, and the Parties agree
that the price stated in Article 4 shall be escalated through September
1997 when the Bureau of Labor Statistics (BLS) data, as required, is
available.
Adjustment = 100% Price x Labor E/Labor B
where
Labor B = BLS 3721 (Average aircraft hourly earnings, excluding
lump sum payments, for November 1996)
Labor E = BLS 3721 (Average aircraft hourly earnings, excluding
lump sum payments, for the month in which an option is exercised,
or, in the case of Article 4, through September 1997.
5.3 PAYMENT CONDITIONS
All payments by the Purchaser shall be due in accordance with the
Program Payment Plan, Revision 1, Attachment A hereto. The Contractor
shall submit an invoice for the applicable amount 30 days prior to the
payment due date. For any invoice for payment associated with the
completion of a deliverable item, Contractor shall provide evidence, in
the form of a certification, of the completion of such item. In the
event that the Purchaser does not make payment by the said due date, the
Purchaser shall be liable to pay the Contractor interest at the rate of
LIBOR + 2% per annum on the unpaid balance until such time as payment is
made by the Purchaser. All payments to the Contractor from the Purchaser
shall be in United States Dollars and shall be made by electronic funds
transfer (EFT) to the following account:
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Amendment 16
BAND OF AMERICA, NT & SA
SPACE SYSTEMS/LORAL
ACCOUNT NO. 75-69165
CHICAGO, ILLINOIS
ABA #071-000-039
or other such accounts as the Contractor may specify from time to time
in written notices to the Purchaser.
5.4 RESERVED
5.5 PAYMENTS ASSOCIATED WITH OPTIONS
In the event that the Purchaser exercises any of the options provided
for under this Contract, then the Payment Plan, Attachment A, shall be
amended to incorporate the Price of the option(s)
5.6 DEFERRAL OF PAYMENT
Contractor agrees to deter payment of Ten Million Dollars (US
$l0,000,000) for each of the two Satellites, in Milestones 6 and 8 of
Attachment A. The total amount to be deferred is Twenty Million Dollars
(U.S. $20,000,000). Purchaser shall pay one half of the deferred amount
27 months after delivery to the Launch Site of each Satellite and the
other one half for each Satellite 365 days thereafter. These deferred
four schedule payments are represented by Milestones 24 through 27 in
Attachment A. However, in the event of a Satellite or launch failure,
Purchaser shall pay the full deferred amount for that satellite no later
than one hundred twenty (120) days after the date of the failure.
If Purchaser elects to exercise the Ground Storage option under Article
35, Purchaser shall pay the full deferred amount for that Satellite
within sixty (60) days of the option exercise date.
As a condition to the making and continued availability of the deferral,
Purchaser agrees to provide to SS/L the same terms, covenants, and
security interest in Purchaser's properties and assets, which properties
and assets, in the reasonable judgment of SS/L, are substantially the
same nature and quality and have substantially equivalent value
(relative to the maximum aggregate amount of the secured obligations) as
the properties and assets of Purchaser and its subsidiaries, which at
the time, and from time to time,
15
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Amendment 16
secure the obligations of Purchaser and its subsidiaries under any and
all of its loan, credit and other similar agreements. In the event no
secured obligations of an equal or greater amount and duration exist to
form the basis for establishing the terms, covenants, and security
interest for the purposes of this Article, the Parties agree to
negotiate in good faith a reasonable security interest. The terms,
covenants, and security interest will be specified in a Deferral
Agreement which will be signed by both parties.
15.1
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ARTICLE 6. PURCHASER FURNISHED ITEMS
6.1 LAUNCH VEHICLE AND RELATED SERVICES
The Purchaser is responsible for furnishing the Launch Vehicles and
Launch Vehicle Adapters and related services and Satellite space on an
Atlas or Ariane expendable three stage Launch Vehicles.
6.2 LAUNCH BASE FACILITIES
The Purchaser shall arrange with the Launch Agency to make available to
the Contractor, on a rent-free basis, the facilities, items and services
set forth in the documents required by the Launch Agency deliverable
under Annex 2 of Exhibit A to this Contract. Specification and delivery
schedules for such items shall be established at the Critical Design
Review (CDR) and may be revised later by mutual agreement if considered
necessary as a result of review meetings at the Launch Agency.
6.4 LAUNCH BY FOREIGN LAUNCH VEHICLE
In the event that is decided by the Purchaser to Launch a Satellite on a
Ariane Launch Vehicle, then the Purchaser agrees to abide by the
provisions of Article 17 for such a Launch.
6.5 FACILITIES FOR IOT
The Purchaser shall make available to the Contractor the use of the
Purchaser's Satellite Control facilities and access to the Satellite for
the purposes of in-orbit testing of the Satellite.
6.6 SPACECRAFT MONTHLY REPORTS
The Purchaser shall provide to the Contractor, no less frequently than
monthly during the on-orbit life of each Satellite, an informal letter
report which shall describe the
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ARTICLE 7. Reserved.
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ARTICLE 8. INSPECTION, INTERIM AND FINAL ACCEPTANCE
8.1 INSPECTIONS AND TESTING OF SATELLITES
The Satellites shall be subjected to inspection and acceptance testing
in accordance with Exhibit A, Statement of work, Exhibit C, Product
Assurance Plan and Exhibit D, Test Plan. The Purchaser shall have the
right to conduct inspections of the Satellite and witness acceptance
testing in accordance with the paragraph below, and to examine the test
data resulting from such tests. The Contractor will give reasonable
advance notice to the Purchaser, when practicable, as to the time such
tests will be conducted and the nature of the test. Failure of the
Purchaser to witness the tests shall not prevent the tests from
proceeding.
8.2 INTERIM ACCEPTANCE OF THE SATELLITE
The Satellite(s) will be inspected and subject to interim Acceptance by
the Purchaser at the Contractor's Palo Alto facility. Upon completion of
the Purchaser's inspection of the Satellite and upon satisfactory
completion of the acceptance testing by the Contractor, the Purchaser
shall provide written notice to the Contractor of its interim Acceptance
of a Satellite. This written Interim Acceptance shall be provided at the
Satellite Preshipment Review, to be held in Palo Alto, prior to the
shipment of the Satellite to the Launch Site.
8.3 FINAL ACCEPTANCE OF THE FIRST AND SECOND SATELLITE
When the first and second Satellites arrive at the Launch Site,
inspection and verification testing will be performed by the Contractor
to make sure that no damage occurred to the Satellite(s) during shipment
to the Launch Site. The Satellite will be tested at the Launch Site in
accordance with the requirements of Exhibit D, Test Plan
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and following successful completion of those tests the Purchaser shall
provide the Contractor with written notice of Final Acceptance of the
Satellite at the conclusion of the Satellite Launch Readiness Review in
accordance with Exhibit A, Statement of Work.
8.4 FINAL ACCEPTANCE OF THE THIRD SATELLITE
Final acceptance of the third Satellite shall occur upon delivery of
such Satellite to Purchaser's designated CONUS ground storage facility.
8.5 FINAL ACCEPTANCE OF THE TT & C GROUND EQUIPMENT (IF APPLICABLE)
Upon completion of the Purchaser's inspection of the equipment and upon
satisfactory completion of the preshipment review the Purchaser shall
provide written notice to the Contractor that the Ground Station
Equipment is acceptable for shipment to the Purchaser's New York, NY
site. The Contractor shall conduct the Final Acceptance test at the
Purchaser's earth station in New York, NY not less than three months
prior to the first Launch and assemble a "punchlist" of deficiencies
that are subject to correction prior to the Purchaser's Final Acceptance
of the equipment. The Purchaser shall provide written notice to the
Contractor that the Ground Station Equipment is finally accepted upon
correction of the deficiencies contained on the "punchlist".
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ARTICLE 9. F.O.B. POINT, TITLE, AND RISK OF LOSS
9.1 TITLE AND RISK OF LOSS
The title, risk of loss and/or damage for the first and second Satellite
to be delivered hereunder shall pass to the Purchaser at the time of
Launch of the Satellite or in accordance with the requirements of
Article 35 hereof in the case of a Satellite delivered for storage.
Title for the third Satellite to be delivered hereunder shall pass to
Purchaser at the time of shipment to the Purchaser designated CONUS
storage site. Risk of Loss for the third Satellite shall pass to
Purchaser upon delivery of the Satellite to the Purchaser CONUS
designated storage site. Neither the Contractor nor any of its
subcontractors or suppliers at any tier shall be liable to the Purchaser
or its agents, representatives, or customers (including insurers of
Satellite(s)) for loss of or damage to a Satellite after launch,
regardless of the cause or theory. The Contractor's sole responsibility
in the event of such loss or damage shall be as set forth in Sub-Article
25.1. In the event that the contractor furnishes post-launch mission or
operational support under this or any related agreements with the
Purchaser, the Contractor and its subcontractors and suppliers shall
have no liability for loss of, or damage to, the Satellite(s) arising
from or related to that provision of such support. The Purchaser agrees
to indemnify and hold harmless the Contractor for all costs, expenses
and losses of the Contractor that result from claims or litigation based
upon the contractor's alleged responsibility, or liability, or the
alleged responsibility of the Contractor's subcontractors or suppliers
for loss of, or damage to, the Satellite(s) occurring after Launch,
regardless of the cause or theory.
9.2 F.O.B. POINT
The F.O.B. point shall be the designated Launch Pad.
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9.3 TERMINATED IGNITION CONTINGENCY SUPPORT
In the event of the occurrence of a terminated ignition of the Launch
Vehicle used for the Launch of the first and second Satellite to be
delivered hereunder, the Parties agree that unless Purchaser provides a
stop work order to Contractor within eight (8) hours of such event,
Purchaser agrees to have Contractor re-assume Title of the Satellite and
immediately commence work subsequently required to ready the Satellite
for a Launch Vehicle relaunch (including, as applicable, demating and
defueling of Satellite, procurement of applicable insurance(s),
Contractor taking re-possession of the Satellite upon its removal from
the Launch vehicle, storage, shipping of Satellite back to Palo Alto,
refurbishing, retesting, reshipping, and re-initiation and performance
of a subsequent Launch, and any other related effort). It is agreed by
the Parties that such support shall be provided at Purchaser's expense
and shall be subject to an equitable adjustment to the Contract for
schedule and the price of such work as mutually agreed to by the
Parties. Equitable adjustment for such work and all affected terms of
this Contract, its Exhibits and Schedule(s), as applicable, shall be
negotiated within thirty (30) days of the terminated ignition event or
as otherwise agreed to by the Parties.
In such event where Contractor proceeds with the terminated ignition
contingency support as described in this Article 9.3, the application of
Article 25 shall also apply.
In such event where Contractor proceeds with the terminated ignition
contingency support and pending final negotiation of an equitable
adjustment, both as described in this Article 9.3, the Parties agree to
perform their respective obligations described elsewhere in this
Contract.
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ARTICLE 13. SATISFACTORY OPERATION
13.1 DEFINITION
For purposes of calculating In-Orbit Check Out amount, the term
"Satisfactory Operation" means that the Satellite is in conformance with
the requirements set forth in Exhibit B Satellite Performance
Specification to this Contract, taking into account tolerances for
measurement accuracy; provided, however, that any failure of the
satellite to meet the performance specified in said Exhibit which is
capable of being corrected by switching to one redundant unit in the
Satellite within 30 minutes after said failure is discovered, shall not
be deemed as causing nonconformance to said Exhibit.
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ARTICLE 14. ADDITIONAL SATELLITE OPTION
14.1 ORDER FOR OPTIONAL SATELLITE
The Purchaser may, at its option to be exercised in writing at any time
on or before 10 Mar 1999, order the Contractor to produce and deliver an
additional Satellite identical to those being furnished pursuant to
ARTICLE 2 -SCOPE OF WORK.
14.2 DELIVERY OF OPTIONAL SATELLITES
If the optional Satellite in ordered on or before 10 Mar 1998, then the
delivery of the optional Satellite shall be six months following the
delivery of the third Satellite ordered hereunder. If the optional
Satellite is ordered after 10 Mar 1998, then the delivery of this
optional Satellite shall be 28 months after the option is exercised, or
six months following the delivery of the third Satellite ordered
hereunder, whichever is later.
14.3 OPTION PRICES
The Prices for ordering an additional Satellite is as shown in the
tables below:
Ordered Ordered
on or before between
10 Mar 1998 11 Mar 1998 and 10 Mar 1999
Satellite
at Delivery $82,000,000 $86,500,000
The above Prices shall be escalated in accordance with the formula
provided in Article 5, from November 1996 to the date of option
exercise.
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14.4 PAYMENT PLAN
A Payment Plan for an optional Satellite ordered on or prior to 10 March
1998 is included in the Payment Plan, Attachment A. A Payment Plan for
an optional Satellite order in the period from 11 March 1998 to 10 March
1999 is also included in Attachment A.
14.5 TERMS AND CONDITIONS
In the event that the option provided for under this Article is
exercised by the Purchaser, then the terms and conditions of this
Contract shall be applicable to such option (unless the Parties agree
otherwise), except for the financial provisions of the Contract which
will be modified to reflect the procurement of the additional optional
Satellite.
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ARTICLE 15. SUCCESSFUL INJECTION
15.1 DEFINITION
Injection of a Satellite shall be considered successful if both of the
following circumstances occur:
a. No damage occurs to the Satellite which can be shown to
have resulted from Launch Vehicle failure or malfunction.
b. The elements of the transfer orbit attained by the Launch
Vehicle and Launch Vehicle orientation at the time of
separation of the Satellite from the launch vehicle are
within the 3-sigma limits of the Launch Vehicle
performance established by the Contractor.
15.2 UNSUCCESSFUL INJECTION
If the transfer orbit attained by the Launch Vehicle or Launch Vehicle
orientation at the time of separation of the Satellite from the Launch
Vehicle are outside the 3-sigma limits, the Satellite injection shall be
considered unsuccessful. However, the Contractor shall use its best
efforts to utilize the propulsion capabilities of the Satellite to
achieve a successful final orbit.
Notwithstanding achievement of successful final orbit, this situation
shall be treated as an "Unsuccessful Injection." Payment of the amount
specified in the Payment Plan for in-orbit check out shall be made and
the Purchaser shall then have the right to use said Satellite for any
purpose without incurring any obligation to the Contractor.
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ARTICLE 16. INSURANCE OPTION
16.1 EXERCISE OF OPTION
Purchaser may, at its option, to be exercised in writing up to twelve
(12) months prior to the scheduled delivery date of the first and second
Satellite, order Contractor to procure insurance on a specified Launch
Vehicle to cover the risk of loss to the applicable Satellite for the
period of time from Launch (as defined in this Contract) through launch
as defined in the applicable Launch Services Agreement.
16.2 PRICE AND PAYMENT TERMS
Upon written receipt by Contractor of Purchaser's election to exercise
this option, Contractor shall provide Purchaser with the Price and
payment terms for this option within thirty (30) days. If Purchaser
accepts Contractor's Price and payment terms, then the exercise of this
option shall be subsequently effected through an amendment to this
Contract.
16.3 RISK OF LOSS
Subsequent to agreement by the Parties on the Price and applicable terms
for this option, the Parties agree that risk of loss of the affected
Satellite(s) shall pass at the end of the period covered by this
insurance option.
16.4 TERMS AND CONDITIONS
In the event that the option provided for under this Article 16 is
procured by Purchaser, the remaining terms and conditions of this
Contract, as applicable, and, as modified in this Article 16, shall
apply.
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ARTICLE 17. OPTION FOR LAUNCH ON A FOREIGN LAUNCH
VEHICLE FOR FM 1 AND FM 2
17.1 The Purchaser shall have the option to choose to Launch the first
and second Satellites procured under this Contract on an Ariane Launch
Vehicle. Should the Purchaser select this option, it must be exercised
within six months after 11 September 1997. Costs Associated with the
Launch on an Atlas Launch Vehicle are included in the Price provided for
in Article 4 - Price.
17.2 ADDITIONAL COSTS ASSOCIATED WITH A FOREIGN LAUNCH VEHICLE
The Parties recognize that there is an additional cost to the Contractor
associated with providing Launch services to support a Launch on a
foreign Launch Vehicle other than on an Atlas Launch Vehicle. In the
event that this option is exercised, the additional Price to be paid to
the Contractor shall be as follows:
Ariane Launch $525,000 per Satellite
(SATELLITE WITHOUT COMMAND ENCRYPTION)
The above price shall be subject to escalation from November 1996 to the
date of option exercise.
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17.4 DELAYED LAUNCH
If there is a delay in any Launch which is caused by exercising this
option for any other reason which is not caused solely as a result of
actions or inactions of the Contractor, then the Purchaser shall pay
interest on the amount specified in Sub-Article 17.2 at the rate of
LIBOR + 2% for the period of the delay.
17.5 U.S. GOVERNMENT LICENSE
Contractor shall obtain export licenses as required for each Satellite
and Purchaser agrees to use its best efforts in assisting Contractor in
such efforts. Contractor has no liability for costs, damages or expenses
incurred by the Purchaser for any reason whatsoever, regarding any
decision on the part of the U.S. Government with regard to the issuance
of a license, or refusal to issue a license for Launch on a non-U.S.
Launch Vehicle. Both Parties agree to abide by the provision of any
license for Launch issued by the U.S.
Government.
17.6 PURCHASER'S DOCUMENTATION REQUIRED FOR LICENSE APPLICATION
The Purchaser agrees to provide the Contractor with the Purchaser's
documentation required for submitting any license request.
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17.7 OPTION TO LAUNCH OPTIONAL SATELLITE ON A FOREIGN LAUNCH VEHICLE
The Purchaser may exercise the option to Launch the optional Satellite
on a Foreign Launch Vehicle. Such option must be exercised at the time
the option for an additional Satellite is exercised, and shall be in
accordance with the terms of Article 17. The additional Price for
Launching an optional Satellite on an Ariane Launch Vehicle shall be as
follows:
Launch on Ariane $525,000
(Satellite without Command Encryption)
Prices quoted above represent excess costs over a Launch on an Atlas
Launch Vehicle, on an Atlas Launch Vehicle. The above Prices shall be
escalated in accordance with the formula in Article 5 from November 1996
to the date the option is exercised.
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ARTICLE 22. INDEMNITY - PERSONAL INJURY/PROPERTY DAMAGE
22.1 CONTRACTOR INDEMNIFICATION OF THE PURCHASER
The Contractor shall indemnify and hold harmless the Purchaser from any
loss, damage, claims, liability, and causes of action for injury or
death of any person, or for damage to, or destruction of, property
(excluding any Satellite provided under this Contract following the
Launch of such Satellite) arising out of negligent acts or omissions by
the Contractor or any of its subcontractors occurring at or before the
Launch of the last Satellite to be ordered under this Contract, to the
extent of such loss, damage, claims, liabilities or cause for action,
except in cases involving fault or negligence on the part of the
Purchaser. The Contractor's responsibility with respect to items
delivered hereunder shall be solely governed by the provisions of
Article 25, WARRANTY.
22.2 PURCHASER INDEMNIFICATION OF CONTRACTOR
The Purchaser shall indemnify and hold harmless the Contractor from any
loss, damage (not including any lost profits or consequential damages),
claims, liability, and causes of action for injury or death of any
person, or for damage to or destruction of property arising out of
negligent acts or omissions by the Purchaser and its Consultants
occurring at or before the Launch of the last Satellite to be ordered
under this Contract, to the extent of such loss, damage, claims,
liabilities or cause for action, except in cases involving fault or
negligence on the part of the Contractor.
22.3 PROPERTY DAMAGE INSURANCE
Contractor certifies that as of the effective date of this Contract it
has all-risk property insurance and will maintain such policy through
completion of this Contract.
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The Contractor's termination claim under Sub-Article 24.4 (a) through
(d) shall be forwarded to the Purchaser within 90 days of the
Contractor's notice of termination to the Purchaser. The Purchaser may
require at its expense that the Contractor's claim for the above costs
be verified by an independent party. Such verification would exclude
Contractor's Proprietary Data.
24.5 RESIDUAL INVENTORY
Following the submission of the Contractor's termination claim to the
Purchaser, the Contractor shall dispose of the residual inventory using
its best efforts to purchase or sell any parts, components, boxes or
subsystems originally bought or manufactured for the Contract on the
best terms possible in the circumstances. In the event the amount of the
Contractor's termination claim exceeds the amounts paid to the
Contractor to the date of termination, the Contractor shall apply the
amounts received from the disposal of the Contract inventory to the
termination claim. In the event that payments to the Contractor by the
Purchaser to the date of termination, plus the amount received from the
disposal of the Contract inventory, is in excess of the Contractor's
termination claim, then the amount of that excess shall be retained by
the Contractor as an offset against lost profits or other damages due to
the Contractor under Sub-Article 24.4 (e) . At the conclusion of the
Contractor's claim for lost profits and damages allowed under
Sub-Article 24.4 (e) , any excess shall be returned to the Purchaser. In
the event that the amount available from the Letter of Credit, plus the
amount paid to the Contractor to the date of termination, plus the
amount received by the
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ARTICLE 27. CHANGES
27.1 CHANGE IN SCOPE OF WORK
The Purchaser-desired changes to the Scope of Work may be implemented
provided the Parties agree in advance upon a mutually satisfactory
Contract adjustment regarding Price, schedule, and other provisions of
the Contract affected by such changes. Any such change shall become
effective only upon the execution by the Parties of an amendment to this
Contract incorporating such changes and the resulting adjustment. The
Contractor shall have no obligation to proceed with the
Purchaser-desired changes prior to the execution of such an amendment or
receipt of a funded Authorization to Proceed (ATP) wherein the Purchaser
assumes the cost of the Contractor's performance on the desired change.
27.2 CHANGES IN UPLINK FREQUENCIES
Purchaser, at no additional cost or change in delivery, may direct
Contractor to make changes to the payload receive center frequency,
Exhibit B: 2.2.1, to be within the range of 7031.25 to 7072.50 MHz; and
the on-orbit command uplink center frequency, Exhibit B: 2.4.2.1.2, to
within the range of 7025 to 7075 MHz, provided such changes be made no
later than 30 September 1997.
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ARTICLE 29. LAUNCH DATES
The Purchaser will establish the Launch Vehicle supplier and Launch
dates for each of the Satellites consistent with the schedule for
delivery provided under this Contract, within six months after 11
September 1997 for the first and second Satellites, and, for the third
Satellite, eighteen months prior to its scheduled delivery. The
Purchaser will advise the Contractor, in writing, of the Launch Vehicle
supplier and the Launch dates established.
29.1 DELAYED LAUNCH
The Parties agree that the Purchaser shall reimburse the Contractor by
means of an equitable adjustment in Contract Price, schedule and other
affected terms of this Contract, if a scheduled Launch date is postponed
and such postponement is not attributable to acts or omissions of the
Contractor.
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ARTICLE 34. RESERVED
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Intentionally left blank
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ARTICLE 35. SATELLITE GROUND STORAGE OPTION
35.1 NOTIFICATION
The Purchaser may, at its option to be exercised no later than three (3)
months prior to the projected delivery date of the first or second
Satellite, order the Contractor to store a Satellite for a period of up
to two years after Interim Acceptance of the Satellite. In the case of
the third Satellite to be delivered hereunder, Purchaser may, also at
its option, order the Contractor to provide ground storage for the
Satellite up to two years after Final Acceptance of the Satellite.
35.2 STORAGE LOCATION
Such storage shall be performed at a Contractor controlled facility and
shall be conducted in accordance with the Satellite Storage Plan
described in Section 8 of Exhibit D, Program Test Plan.
35.3 STORAGE AND VERIFICATION TESTING PRICES
The storage price for a Satellite at Contractor's storage facility is
$30,000 per month of storage. Upon removal of a Satellite from storage,
verification testing shall be conducted. The price of such verification
tests shall be $122,000, if the Satellite storage was for six (6) months
or less, or, $1,075,000, if the Satellite storage was greater than six
(6) months through twenty-four (24) months after exercise of this
option.
For a Satellite stored for two (2) years, Purchaser shall notify
Contractor of its desire to have such Satellite refurbished or to
continue ground storage of a Satellite for up to an additional twelve
(12) months beyond the period specified in Article 35.1. Within ninety
(90) days after Contractor's receipt of Purchaser's notice electing
refurbishment or continued Ground Storage, Contractor shall provide
Purchaser with (i) a plan for refurbishment and a retest plan to rectify
the Satellite as Launch-worthy or (ii) a plan for continued ground
storage, in either case together with proposed adjustments to applicable
provisions.
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35.4 PAYMENTS
If the storage option is exercised, the following payment schedule shall
be adopted subject to the total storage period ordered. The monthly
storage charge referred to in Sub-Article 35.3 shall be paid commencing
thirty (30) days from the date the Satellite is stored and continuing
each month until the Purchaser directs the Contractor to remove the
Satellite from storage, conduct the verification tests and ship the
Satellite to the Launch Site. Payment for the verification testing shall
be made 30 days after the Contractor issues an invoice for such
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ARTICLE 36. NOTICES
Any notices or correspondence required or desired to be given or made
hereunder shall be in writing and shall be effective when delivered to
an authorized recipient party at the address indicated below:
PURCHASER: CD Radio Inc.
1001 22nd Street, NW
6th Floor
Washington, DC 20037
Attention: Mr. R. D. Briskman
Phone: 202 296 6840
Fax: 202 296 6265
CONTRACTOR: Space System/LORAL
3825 Fabian Way
Palo Alto, California 94303-4697
Attention: Glenn Halperin ( M/S PS-1)
Phone: (415) 852-5673
FAX No. (415) 852-7508
Either party may change the above notice address by giving written
notice to the other party of said change.
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ARTICLE 39. Reserved
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ARTICLE 40. EXTENDED MISSION OPERATIONS SUPPORT OPTION
For 24 months from the date of 11 September 1997, the Purchaser shall
have the option to direct the Contractor, in writing, to provide
Extended Mission Operations Support in accordance with Exhibit A. This
support shall last for six (6) months from the completion of IOT Summary
Review of the first Satellite delivered hereunder. The ROM estimate for
providing Extended Mission Operations support is as follows: $500,000.
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ARTICLE 41. SUPPORT FOR INVESTIGATION OF SATELLITE ANOMALIES
In the event that a Launched Satellite experiences anomalies during its
operational life, the Contractor will provide reasonable support by
qualified personnel to investigate said anomalies from Palo Alto, CA.
The Contractor shall use its best efforts to identify the cause of the
anomaly and to provide operational procedures to avoid such an anomaly
occurring again. The above effort shall be provided on the verbal
request of the Purchaser which shall be confirmed in writing within 24
hours of the time of the verbal request.
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ARTICLE 44. DARS LICENSE
It is agreed between the Parties that if Purchaser (or its successor)
cannot enter the DARS business due to actions of the U.S. Government
which deny Purchaser the license to enter into the DARS business and
such denial is due to circumstances beyond Purchaser's control, this
Contract shall terminate upon receipt of written notification by
Purchaser to Contractor of such condition accompanied by appropriate
documentation from the regulatory agency.
In the event of termination under this Article, Purchaser shall pay
Contractor within thirty (30) days of invoice (1) Contractor's incurred
costs for all work performed prior to termination, (2) termination
related costs including those resulting from termination of
subcontractor or vendor contracts, plus (3) a reasonable profit on the
costs of (1) and (2) above less any payments made by Purchaser on this
Contract prior to termination.
Upon termination of this Contract under the terms of this Article, the
rights, obligations and liabilities of all Parties with respect to this
entire Contract shall thereupon terminate (unless the Parties have
expressly agreed otherwise, and except for articles that by their nature
are intended to be applicable following such termination under this
Article), and Contractor shall not be obligated to deliver any
additional items under this Contract.
This Article shall become null and void once the DARS license issued to
Purchaser (or to any successor entity) is no longer subject to
reconsideration by the U.S. Government.
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CD RADIO
PAYMENT PLAN
(Amounts in Millions)
<TABLE>
<CAPTION>
Payment Due Date Payment Payment Amount Milestone
Month Number ($M)
<S> <C> <C> <C> <C>
EDC 1 0.10 Effective Date of Contract
- ----------- -------------- ----------- -------------------- -------------------------------------------------
1-5 11 Apr 97 2 6.50 Headstart Schedule Payment
- ----------- -------------- ----------- -------------------- -------------------------------------------------
6 11 Sept 97 3 24.65 Schedule Payment
- ----------- -------------- ----------- -------------------- -------------------------------------------------
9 11 Dec 97 4 18.15 Conduct System PDR
- ----------- -------------- ----------- -------------------- -------------------------------------------------
12 11 Mar 98 5 18.15 Conduct System CDR
- ----------- -------------- ----------- -------------------- -------------------------------------------------
12 11 Mar 98 5 6.50 Start Third Satellite
- ----------- -------------- ----------- -------------------- -------------------------------------------------
15 11 Jun 98 6 (18.15*) 8.15 Deliver Preliminary CIL (Config. I.D.List)
- ----------- -------------- ----------- -------------------- -------------------------------------------------
16 11 Jul 98 7 5.25 Schedule Payment
- ----------- -------------- ----------- -------------------- -------------------------------------------------
18 11 Sept 98 8 (18.20*) 8.20 Complete Comm Panels (PM-1)
- ----------- -------------- ----------- -------------------- -------------------------------------------------
19 11 Oct 98 9 6.60 Schedule Payment
- ----------- -------------- ----------- -------------------- -------------------------------------------------
21 11 Dec 98 10 18.20 Complete PM-1 Central Cylinder
- ----------- -------------- ----------- -------------------- -------------------------------------------------
22 11 Jan 99 11 9.00 Schedule Payment
- ----------- -------------- ----------- -------------------- -------------------------------------------------
24 11 Mar 99 12 18.20 Submit Satellite orbital Oper Hdbk, vol. 1
- ----------- -------------- ----------- -------------------- -------------------------------------------------
25 11 Apr 99 13 10.10 Schedule Payment
- ----------- -------------- ----------- -------------------- -------------------------------------------------
28 11 Jul 99 14 11.20 Schedule Payment
- ----------- -------------- ----------- -------------------- -------------------------------------------------
28 11 Jul 99 14 10.30 Schedule Payment
- ----------- -------------- ----------- -------------------- -------------------------------------------------
29 11 Aug 99 15 19.20 Ship PM-1 to Launch Site
- ----------- -------------- ----------- -------------------- -------------------------------------------------
30 11 Sept 99 16 2.20 Complete IOT on PM-1
- ----------- -------------- ----------- -------------------- -------------------------------------------------
31 11 Oct 99 17 8.10 Schedule Payment
- ----------- -------------- ----------- -------------------- -------------------------------------------------
33 11 Dec 99 18 13.20 Ship PM-2 to Launch Site
- ----------- -------------- ----------- -------------------- -------------------------------------------------
34 11 Jan 00 19 6.50 Schedule Payment
- ----------- -------------- ----------- -------------------- -------------------------------------------------
36 11 Mar 00 20 2.05 Compete IOT on PM-2
- ----------- -------------- ----------- -------------------- -------------------------------------------------
37 11 Apr 00 21 8.45 Schedule Payment
- ----------- -------------- ----------- -------------------- -------------------------------------------------
40 11 Jul 00 22 7.05 Complete Satellite Testing
- ----------- -------------- ----------- -------------------- -------------------------------------------------
44 11 Nov 00 23 5.75 Ship PM-3
- ----------- -------------- ----------- -------------------- -------------------------------------------------
56 11 Nov 01 24 5.00* Schedule Payment
- ----------- -------------- ----------- -------------------- -------------------------------------------------
60 11 Mar 02 25 5.00* Schedule Payment
- ----------- -------------- ----------- -------------------- -------------------------------------------------
68 11 Nov 02 26 5.00* Schedule Payment
- ----------- -------------- ----------- -------------------- -------------------------------------------------
72 11 Mar 03 27 5.00* Schedule Payment
- ----------- -------------- ----------- -------------------- -------------------------------------------------
Total 271.75
</TABLE>
* Ten Million Dollars (U.S.$10,000,000) each from milestones six (6) and eight
(8) will be deferred to milestones twenty-four (24) through twenty-seven (27) in
accordance with Article 5.6. Deferral of payment
Program Payment Schedule
One Optional Spacecraft
Per Article 14
Payment Month Payment Number Ordered Ordered
ARO Prior to 11 Apr 98 (Prior to 9 Apr 99
($000,000) ($000,000)
- ------------- -------------- ------------------ ------------------
0 1 $6.5 $6.9
4 2 $5.1 $5.6
7 3 $6.4 $6.7
10 4 $8.8 $9.3
13 5 $9.9 $10.5
16 6 $10.3 $11.1
19 7 $7.9 $8.5
22 8 $6.3 $6.6
25 9 $8.3 $8.7
28 10 $6.9 $7.1
32 11 $5.6 $5.5
Total $82.0 $86.5
A-1
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Attachment B
Reserved
B-1
